Feds shut down online poker industry

In a dramatic move, the FBI has seized the assets of three of the top online poker companies in the world and indicted their executives on charges of bank fraud, money laundering and illegal gambling. Three high-level officials from PartyPoker.com, Full Tilt Poker and Absolute Poker were busted and eight others indicted. The government is also going after three billion dollars of the companies assets.

When you log onto these internet poker sites, the FBI has posted the following:

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The amazing thing is the entire online poker industry was apparently toppled by ONE guy. According to various Australian and U.S. media reports, “boy genius” internet entrepreneur Daniel Tzvetkoff rolled over on his former employers Full Tilt Poker and PokerStars. Tzvetkoff made those companies billions of dollars. According to Australia’s Courier-Mail, they were paying him $150,000 a day but Tzvetkoff got greedy. He allegedly stole $150 million from  PokerStars and Full Tilt Poker.

When Tzvetkoff was visiting Las Vegas last April, either PokerStars or Full Tilt “ratted him out.” Tzvetkoff was busted on the same fraud, money laundering and gambling charges the online executives recently arrested now face. As a foreigner with huge amounts of cash, he was deemed a flight risk and denied bail. Tzvetkoff faced decades in prison. So, he flipped. As Businessinsider.com put it,

“They ratted him out…and he turned the tables. No honor among thieves.”

Tzvetkoff is also the man who figured out ways for online betters in the U.S. to set up accounts to get around the 2006 law passed by Congress that bans internet gambling.

There have already been a wave of stories in various media outlets like the New York Times describing how Congress may re-legalize and tax online gambling as a source of revenue. Last year, the House Financial Services Committe approved such a proposal. However, it never became law. Instead, the feds are looking to go after up to $3 billion from PartyPoker, Full Tilt Poker and absolute Poker.

What happens to your money if you’re one of the thousands upon thousands of Americans with money in one of these poker company’s accounts? Good question. That remains unclear. However, the feds have claimed they’re only going after the $3 billion from the online poker companies. If those companies satisfy the government by eventually paying the $3 billion themselves, their customers’ accounts may be released. That’s what happened in 2007 when a company called Netteller was busted for setting up accounts for the purpose of gambling online. They were busted by the feds but most people ended up getting their money back. On the other hand, you could argue that the very act of gambling or playing poker for money online was made illegal by Congress in 2006 and betters have forfeited the money by participating in an illegal act.

Over 1.8 million Americans reportedly play poker online, spending over $6 billion.

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